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Health Maintenance Organizations: How Will They Handle the New Regulations?
As we know, baby boomers are hitting their retirement age, and they are very likely to opt for managed care plans. This suggests that health maintenance organizations, or HMOs, have a big opportunity to grow. However, new legislation in the U.S. is changing these companies’ profitability. Health care reform regulated modifications in the health insurance rates putting a cap on revenues. Plus, the Affordable Care Act requires HMOs to meet minimum cost ratios, making it harder to benefit from cost reductions. So, margins will remain tight. Read more…